What is the challenge?
Running a small business comes with both triumphs and tribulations. In Live Oak Bank's Voice of the Customer study, a key challenge emerged: attracting and retaining qualified employees. This isn't unique – many small businesses struggle with this. Here's a breakdown of the main hurdles:
1. Attracting top talent
Live Oak Bank's Voice of the Customer study further emphasized the critical issue of staffing. Nearly half of the surveyed small business owners identified finding and keeping talented employees as a major concern. For brick-and-mortar stores, geographic limitations can restrict their customer base. Additionally, smaller businesses often face challenges with brand awareness and can be overshadowed by larger, more established competitors.
2. Minimizing employee turnover
Once a small business offers a great candidate a position, there is still a threat of that candidate departing the company. As younger generations enter the workforce, the average length of time pledged to a company has been decreasing. A study by Deloitte revealed that “four in 10 Gen Zs and nearly a quarter of millennials would like to leave their jobs within two years.” Short employee tenures can leave painful gaps in workforces, which can reduce the business’s stability and morale.
3. Limited hiring resources
When seeking to attract and hire top talent, small businesses can struggle to source quality candidates. In smaller companies, a lack of a dedicated recruiter could be challenging. Small businesses often face financial constraints when it comes to hiring. Limited working capital can restrict resources for essential tools like HR software, impactful job postings and dedicating existing employee time to recruitment.
What can be done?
It’s critical to implement strong strategies to promote a meaningful and satisfying employee experience, including:
1. Empower employees
When seeking to cultivate a solid and loyal workforce, employees are a critical cornerstone in this endeavor. As notable talent joins the team, allowing them to utilize and showcase their skills must be top of mind for employers. When employees are empowered to voice their ideas, they will feel far more valued as an integral part of the company’s operations. A Deloitte study found a strong link between employee empowerment and a sense of belonging. When young workers felt they could drive change and take ownership of their work, nearly 90% reported feeling a strong sense of belonging at their company. Cultivating an atmosphere of belonging and empowerment is one of the most effective and powerful tools to build a stable, strong workforce.
2. Culture
Strong company culture, shaped by leadership and reinforced through actions, is a major factor in employee retention. Here are two key areas to focus on when building a positive culture:
Create the Culture
By actively and intentionally choosing core values such as open communication, mutual respect, and an empowering and equitable workplace, and then living these values out, you can cultivate a strong and healthy culture.
Showcase the Culture
Once culture becomes a priority, showcasing the health of the company will be an authentic and compelling way to attract and retain a quality workforce. Utilizing tools like social media can help companies showcase their premier employee culture.
3. Compensation and benefits
In today's competitive job market, a comprehensive compensation package is no longer a nicety, it's a necessity. Competitive wages are essential for attracting and retaining top talent. When employees feel their contributions are valued through fair compensation, they are more likely to be engaged, and invested in the company's success.
Additionally, a well-rounded benefits package demonstrates a company's commitment to its employees' well-being. This could include robust healthcare plans, generous parental leave policies, and retirement savings programs that encourage financial security.
Finally, fostering a culture of continuous learning and development is another key strategy for attracting and retaining talent. By offering opportunities for professional development, mentorship programs, and skill-building initiatives, companies demonstrate their commitment to employee growth and future success.
Wrapping up
While considering these challenges and employee retention tips, business owners are more apt to effectively overcome them and build a strong workforce with staff loyalty and reliable workforce stability. By empowering employees and thinking strategically on ways to attract and retain talent, small business owners will see their company grow and thrive.
